Mad Money w/ Jim Cramer 10/28/26

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1:17Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people, my friends, I'm just trying to save you a little bit of money. My job is not just entertaining, it's to put it in context. So call me at 1-800-743-CNBC or tweet me at Jim Cramer. Look, I'm a stock market junkie. Always have been. Maybe always will be. Performed my first lightning round at a graduation ceremony from Harvard Law School in 1984. In a lightning round, all stocks, big and small, are created equal. And any percentage gains a win. Regardless of what stock it emanates from, even a tiny one. But for a couple of days of the year, we just can't focus on those percentage gains from smaller companies because we have a handful of behemoths that are now the hallmark of this market and they control the process.

2:05On a day when the Dow was up 98 points, this would be gained 0.28 percent. And the Nasdaq found it a late day comeback to finish up 0.27 percent. You need to know some stocks are more equal than others. What makes for a higher priority stock in this market. First, it has to have nation-state status, where the ability to raise money in return for offering endless amount of services can just happen like that. It needs a big boat instead of an army and a major part of the GDP of an important governmental entity like the U.S. It has to make a huge and growing amount of money per product. The products have to be sold to either the consumer or the enterprise, or ideally both.

2:39Management has to have cutting-edge technology, has to be willing to go outside the comfort zone and spend more money than they have,

3:06Now, I don't want to jump the gun. Even these 10 companies, no matter how powerful, cannot withstand the currents of the war and interest rates. They are not kayaks or dinghies in an ocean filled with five-handled treasury yields and triple-digit oil prices. They're more like aircraft carriers, not easily blown to and fro, but not immune either. As always, macro factors can upset any flight path. At this moment, oil and rates are having an outsized influence when it comes to the direction of these stocks. Today, oil jumped as the president talked about launching some sort of short and tense action against Iran, maybe the Hooties.

3:38It was all a bit vague. At the same time, Fed Chairman Warr spoke after the two-day Federal Reserve Open Market Committee meeting, and he made it very clear that inflation was still too high. But before the Iranian war and the roaring price of oil just made it worse, he said you can't ignore the price of oil just because it could go down one day when you are pumping expensive gasoline in your car right now. Warr has traced a picture of economic strength that is too strong for its taste because it's fueled by all sorts of excessive spending without much restraint by consumers or by corporations.

4:09We could all take his spartan words to mean different things. I heard him say that we aren't going to get inflation down to 2%, his target, with this much spending. He reminded us that the power of his interest rate, S.O.R.D., is big, pointing out that some companies have been more discerning in their spending after that quarter-point raise he already gave us. If he can tamp down more of the spend, then he can get the inflation rate in line. Maybe he can do that by jawboning. I like that. I listened. I didn't hear anything that could derail the biggest companies. In fact, in a serendipitous moment, Oracle came out and talked about how its data center spend is paying off, lessening the credit quality issues that have dogged it.

4:47Porsche's statements didn't do that much to the market. It wasn't an accelerator and it wasn't a glancing blow either. I sense another rate hike in December. Maybe there aren't some big decisions that will be deferred in spending curve, but I think the interest rate increase is working. All that said, the nation state companies that reported tonight, Alphabet and Microsoft, weren't impacted all that much by a tough-talking web, but they were impacted by the personal business. Alphabet and Microsoft, both with market caps of just under$4 trillion as of tonight's close, have tentacles that do not confine themselves to their own lanes.

5:21They skate in multiple lanes, Alphabet and Search, YouTube, Chrome, Waymo, Google Cloud Services, Microsoft and Enterprise, consumer software, Azure, LinkedIn, video games, Copilot. They have all developed really good artificial intelligence capabilities. Alphabet was the big story tonight, though. And it was not a positive one. Alphabet posted disappointing double miss on both the top and bottom lines, sending shares down sharply after hours. Revenue grew nearly 25%. We should be happy with that, right? But Surge, which accounts for about half of sales, came in about a billion and a half dollars below expectations.

5:59That's likely to reignite the debate about whether AI is eating into Google's core business. The bright spot was cloud, where revenue was more than doubled and beat expectations, going 103%. Gemini now has more than a billion monthly active users. Capital spending also came in below expectations, though the company signaled a significant increase in CapEx for next year. Free cash flow is also negative$9.1 billion, something you hate to see from a company that used to spewed cash and had a pristine balance sheet. Part of the challenge now is deciding how much computing power and how many of its custom AI chips go to paying cloud customers versus its own products, including Gemini.

6:38Cloud is delivering, but that wasn't enough to offset a disappointing quarter for the core business that pays for these ambitions. Microsoft, on the other hand, wow. Great story. Beat on every single lie. Total revenue grew 19%, easily beating expectations, while the companies' earnings per share surge, 32 % transit consensus estimate by$0.19. Highlight, Azure business grew 48 % year-over-year. We were only looking for 45 % growth. That's pretty stunning. I remember we were hoping to get back to 40 % for Azure, which is their cloud business, but the AI tailwind keeps getting better and better and better.

7:12Aside from that, Microsoft showed a degree of spending discipline that makes it unique among these so-called hyperscalers, which is why I think it's going to leap out and be the best of them. CapEx results much lower than we thought. Now, remember, with Microsoft, you're never out of the woods until the conference calls over. That's happening now, so we'll see what they have to say, especially about their capital spending plans and their guidance for the current quarter. But assuming no major surprises, this was the winner from tonight's two big magnets. There's in seven reports. Don't worry, there's a lot more coming.

7:38And remember, I'm calling it the Mag-10. We own both of these for the charitable trust, not because of the size of this quarter's performance. We own them for their body of work. Their market capitalization is simply a function of their greatness, although a company can be the size of an aircraft carrier and also be overvalued. I am concerned that that could be the case with Alphabet after Google's poor showing tonight. But the bottom line, we saw tonight why you ignore these stocks, Jerome Pearl. We saw nothing that shocked us, nothing that enraged us. Apple's going to catch a downgrade or two.

8:08Search could really be hurting. But Microsoft, it's justifying the monster move it made off the bottom back at the end of June earlier this year. Let's go to Andrew in South Carolina. Andrew. It's incredible. Is this Professor Kramer? You bet it's Professor Kramer. How are you doing? I'm all right. So I've got a defensive stock. It's pulled back massively near a 52 week low. It gives you a secure 4 % cushion to wait. And it's about to pull off the second largest food merger in history. I'm practically at break even on my position. Should I double down on the seasoning and spice up my portfolio or clear the table and walk away from McCormick?

8:51I think down here at 46, you can't walk away. They made an acquisition. They paid too much for it from Unilever. But at this point, I think that the damage has been done. This used to be a very high multiple stock. It no longer is. Actually, the multiple has almost been cut in half. You stick with it, my friend. Let's go to Chris in Colorado, please. Chris. Hey, Jim. I have a question about I need your advice on my Palantir stock. It accounts for 30 percent of IRA. Buy. Buy. Okay? It's Palantir. Buy. They're the smartest guys I've come across. I'm not kidding. I feel that strongly about Palantir.

9:24Let's go to Sam. Sam. Jim, listen, I was putting on a stock screener to see stocks that companies that are high capital efficiency. I was looking at high ROIC and consistent sales growth. That's where I came across this interesting company, Argon. AGX is the ticker. You see, they're contracted to build power plants, specifically natural gas. Stocks come down dramatically. I think it could be a buy here given the consistent, you know, this is a strong ROIC, strong ROE company. And it's in a secular growth area. You know, we need power generation, whether it's AI or general. I totally agree with you.

10:03We looked at it. We kind of liked it. You know, I've got to tell you, that hasn't certainly made it be a buy. because it's still going down. You know something? I know this is going to sound silly, but Sam, you've got to understand, this is the worst chart I've ever seen. Period. End of story. Today showed us that you ignore Alphabet and Microsoft at your own peril. They're nation-state stocks. They deserve to be treated as such, even as Alphabet did not report a good quarter. Well, man, tonight Chipotle's been cut in half, so what will it take to get the stock moving again? I'm talking guac with the CEO.

10:38And ServiceNow is making a comeback, along with other software stocks. So those that have more room to write up today's report, I don't know, looking a little toppy. I'm going to talk to the top press. And how is WM digesting higher fuel prices? I'm getting all the latest when I sit down with the company's CEO if you're earning. So stay with Kramer.

11:02Don't miss a second of Mad Money. Follow at Jim Kramer on X. Have a question? Tweet Kramer. hashtag mad mentions. Send Jim an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com.

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12:57All right, what are we making these numbers from Chipotle Mexican Grill this evening? This is a stock that's been more than cut in half from its 2024 highs, was down more than 20 % this year, heading to the report. After the close today, Chipotle reported, I guess, was simply regarded as a mixed quarter. Same-store sales rose 2.1%. I like that. It's better than expected. Both customer visits and the average check increasing. That makes three consecutive quarters of positive transaction growth. Earnings came in two cents below expectations. Restaurant margins fell a tad short. So can Chipotle finally get the stock's momentum rolling in a difficult environment for restaurants?

13:30Let's check in with Scott Bore. He's the CEO of Chipotle. Next, we'll be able to find out. Mr. Bore, welcome back to Mad Money. Hi, Jim. Good to be back. Good to see you again. All right. Thank you, Scott. Same to you. Well, we got 2.1 % same-store sales. Now, that is appreciably better than what people are looking for. And I love the fact, by the way, that you've got some good traffic. How do you explain the fact that you were able to beat the consensus of people who thought that things had petered out from the previous quarter? Yeah, it was a really challenging quarter from a consumer perspective, but I'll tell you, our recipe for growth initiatives, as outlined at the beginning of the year, are starting to pay real dividends for us.

14:10The good news is, Jim, we're still early days in that strategy where the core tenets of the strategy are yet to unfold or are unfolding and will build and scale over the coming months. So I'm confident in our ability to drive demand through LTO innovation, deeper engagement with our rewards members, which rewards comps outpaced in restaurant comps for this quarter. And we're seeing a lot of real broad support from all income cohorts as well as age groups. Well, that's important. I mean, some people, you know, the rap is always, hey, look, it went up too much in price. If you're seeing all cohorts come in, then maybe the price is right, so to speak, for more people than I know I realize.

14:51Yeah, I think we still all have this urgency around creating a compelling value offering for our consumer. But I'll tell you, the lower income cohort outperformed the higher income cohort for the first time last quarter, probably in the last two years, which is encouraging for us, which tells us we're on the right track. And our value for the money score has continued to hold steady. We saw a really nice jump in the last quarter, which we're really proud of. We're going to continue to lean into that momentum. All right. So let's go into something that I have historically not cared as much about versus same-store sales.

15:24But I didn't candidly like the direction because it reverted to a pattern from before. Restaurant-level operating margins back to 23.3 % where they were in Q1 2026 after jumping at 25.2 % last quarter. What do you make of that? Yeah, Jim, so some of that was deliberate. We are intentional around promo spending for the quarter, given what was going on within the industry, whether it was the supply chain challenges that the industry faced kind of mid-August. And to arrest and re-support the momentum we had in the business earlier in the quarter, we did some additional spending, which cost us about 40 basis points of margin.

16:03Also, we had some one-time hits in labor as it relates to insurance line items that were not anticipated and particularly transitory. So we have confidence that between the dislocation of our pricing and inflation, which we've talked a lot about this year, and the intentional spending that we did in the quarter, we feel like we're still on the right trajectory to hit our long-term algorithm. And I thought that food costs falling to 29.5 of sales. Again, I want to see that because it makes me feel that maybe inflation is in your industry and at your company a little more in control than others.

16:38Yeah, we think so, Jim. We're still seeing inflation as it relates to stake and freight costs are up year over year at a pretty, pretty significant clip. But nothing we can't manage as we go forward with the right strategy and the right approach. Again, I think it's early days for our great brand. And I think it's important for people to note that while we're early days in the strategy, if you think about the strength of the Chipotle brand, as strong today as it's ever been, with extraordinary fandom, we have food that hits people's needs no matter where they are in their life, whether it's GLP -1, whether it's keto, Whole30, high protein, high fiber.

17:14We're your go-to stop for high-quality, great food at a great price point. And I'd like to remind everyone that we have still industry-leading economics. And, Jim, we have more growth ahead of us than we have behind us. And so we're going to continue to grow and expand. We're going to build a new Chipotle this year about every 24 hours. That growth will continue into 2027. We feel front-footed in a really challenging environment, Jim. We're going to continue to lean into this momentum. Well, let's talk about the challenging environment, because I'm listening to Fed Chief Warsh today. He's talking about spending remains robust.

17:46And then I think to myself, are there too many restaurants that are in the same kind of bracket that you are? For years, I only thought of you. OK, there's Chipotle and that's a step above everybody. And now I don't need to mention competitors, but, you know, there are a bunch of them that people go and they say, oh, good, another 15 to 17. That's really good. Is there too much in your range right now? You know, Jim, I think of us as being more category defining brand within the industry. And I think that's an important note. I don't think there's anyone that really delivers an offering as compelling as ours.

18:21When you think about the way we source ingredients, how we prepare those ingredients fresh every day in restaurant and deliver them at a speed and abundance you can't get anywhere else. If you just take a look at our highest penetrated markets like Ohio and Florida, where we have extreme competition in those markets. Those are the markets we're growing the fastest in today, Jim. And we're still seeing the highest returns in the system out of those markets nearing almost 80 percent year to return on investment, which gives us confidence we can grow in any environment. And I think there's still a lot of white space within fast casual as a percentage of the overall industry spend.

18:56There's a lot of headroom for us. All right. That's very just positive. And I appreciate that granularity, which helps me really does help me put to rest that category. Just on the one-time-only labor issues that you talked about, on wage inflation, these bonuses that you gave, I know you need to retain the best people, but is it getting too expensive, or really will it be you took care of it and maybe you bonus people and they'll stay and we don't have to see that again? Yeah, I think it's right-sized, Jim. Most of that inflation came through insurance and workers' compensation measures, which we'll talk about, which we talked about on the call.

19:35I don't think it's related to employee cop. I think we do have better industry-leading wages for our team members and industry-leading benefits. We've had those for years, though, Jim. And while we've seen modest inflation, I think it's normalized this year. And the labor market seems to be resilient. I mean, we're continuing to be at all-time staffing levels. Our avocado, our AI assistant, has really helped us keep our restaurant staff with better applicants, shorten the time from application to higher. And we feel front-footed as it relates to labor. All right, one last question. You're bringing back one of our faves, the brisket.

20:09That was very well received. When you see something like that, do you expect that maybe you'll get a bump again because it was obviously such a popular favor? Yeah, as we talked about on the call, Jim, we saw some choppiness coming into the Q4. We're guiding Q4 to about a two. We think our exit rate on the year is going to be between 3 % and 4 % growth, which really talks about the strength of what we're going to see with Brisket. And some of the other timing of promos that we have for the fourth quarter, November and December set up very well for us. And again, our initiatives and recipe for growth, whether it's HEAP, whether it's group occasions, catering, which we're launching at Q1 of the upcoming year, there's a lot of momentum in the business that will continue to scale and build over the next few months.

20:53So it should be an exciting quarter for us, Jim. Well, thank you, Scott. I'm very encouraged by the most important metric, which is same store sales. And once again, I always thank you for your confidence in us and coming on our show. I appreciate it. Thank you, Jim. We appreciate being here. Thank you. Scott Boatwright is the Chipotle CEO. That's CMG. And Mad Money is back at the break. Coming up with ServiceNow shares on the move, Kramer is getting the inside scoop with the top brass. Next.

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22:20What happens when you combine a cozy night in with the whole family in matching Old Navy jingle jammies? It's a holiday moment of joy, at least for the time it takes to snap a picture. Shop a plethora of prints this year in jammies for everyone. Adults, kids, toddlers, babies, and even pets. Grab matching sets and classic plaids, whimsical designs, and even Disney-themed prints. Plus, they have coordinating graphic tees, sweatshirts, cozy socks, pet sweaters, and fleece blankets. Get more merry for your money at Old Navy this holiday season.

22:57The enterprise software segment faced a big test tonight after the close when Surface Now turned its results for the third quarter. Look, ever since it bottomed at$81 and changed this past spring, this stock has been leading the group's comeback, climbing nearly in a straight line to over$150 today at the close. Tonight, the company turned in a result that was strong. All right, not perfect, but strong. Company's revenue results look good, as it is booking numbers, which is what I care about. That's encouraging. On the other hand, it missed by two cents on the bottom line. Cash flows for the quarter were considered a bit light.

23:28Guidance was similarly mixed, but we've got to get to the bottom of that. Is it enough to keep the stock in rally mode? Let's go straight to the source with Bill McDermott, the chairman and CEO of ServiceNow. Mr. McDermott, welcome back to Mad Money. Thank you, Jim. Great to be back with you. All right. So, Bill, there's a ton to go over here. But first, I want to give you some credit. You came on the show when the stock was 104 and you were very loud. You bought three million dollars a stock. You were making a statement. And the statement was, this is getting ridiculous. How did you know that it was overdone and that the whatever it was on Wall Street had disconnected from the fundamentals of service now?

24:05Jim, this is a unicorn growth company. Think about Fortune 500 economics with a superintelligence control tower that's literally reinventing businesses all over the world. So I knew the exceptional super intelligent economics where you have a capital light, margin rich, consumption driven company that's really providing AI value without all of the big cost items like chips and CapEx and data centers. We just have a margin profile that's perfect and a growth company operating at the rule of 57. When you add up free cash flow and margin growth, it's the only company I'm aware of that's doing that in the enterprise software world.

24:54Oh, that is true. And now Armis, which you bought for$7 billion, to some it was a head scratcher. Why is this man moving into cybersecurity? In retrospect, I think people now call service now because they don't know what to do. Everybody's scared. And I think that you've got the right property to be able to help. Jim, you said it right. The superintelligence control tower actually takes the right model. It hires it for the right job to solve the right problem to unlock the real opportunities that companies have out there. So we're unlocking the value from the entire superintelligence ecosystem, from silicon to intelligence.

25:38And we're executing this on one platform. So you and I spent a lot of time with my good friend, our good friend, Jensen at NVIDIA. Think about AI governance that takes software all the way through to the silicon. And it's an industry first of its kind. So you have a long-running personal AI agent at ServiceNow. It gets better with every interaction. It has runtime enforcement. So ServiceNow sets the rules and rails. NVIDIA OpenShell enforces them at runtime. So we have a kill switch that can revoke the passport for a person, an agent or a robot and block the action at the point of execution, not after damage is done.

26:22And that's what everybody wants. They want a secure, super intelligent control tower to run their business and drive profits for their shareholders. And that's what we're giving them. But why do some of these people in these frontier models say that there is no such thing as a kill switch? Are they just wrong? Well, they're looking at it a little bit differently. I'm looking at the enterprise software world, and I think that's why OpenAI today announced a major partnership with ServiceNow, because they all want to turn frontier intelligence into governed enterprise execution. So if you think about the superintelligence control tower, we're using OpenAI VoiceNow, ChatGPT, to simplify AI risk assessment.

27:11And we have something we call shift zero, where you're stopping threats before they become incidents. And if you think about builders out there with codex, they're now going to run it through ServiceNow with rules and rails. And that's the same announcement we made with Google and several other great companies today like Anthropic, AWS, Cisco, OpenAI, of course, Stripe, NVIDIA, and many others. And that is what's missing, Jim. One control tower that connects your people, your agents, all your lab models, because they're all great companies. It unifies your data. It integrates with a complex infrastructure and enterprises, and it gets you to value fast.

27:56Customers want value now. And they don't want a proof of concept. They're tired of the stories and they're tired of laying out money without getting a return. I am absolutely sure that is the case. But I also have to deal with what we see on the tape, so to speak. And we know the tape's wrong a lot because it's been wrong a lot when we come to service now. But people are saying, listen, there are estimates out there. It missed the earnings estimates by two cents. They're not looking at the revenue growth, which was really strong. The RPO, which is terrific. They're not really looking at growth and margin.

28:30They're saying, no, he missed by two cents. And that's just not excusable with this iMarket multiple. Well, let me offset that a little bit. First of all, the two cents has to do with the interest on the companies we just bought. And the companies we just bought, that impacts EPS. But we now, in this quarter, and we just bought them in April, announced 150 basis point improvement in operating margin. We have free cash flow at 36%. And we have our revenue in RPO. And everyone said you'll have shorter duration contracts and they'll be lower in value. Actually, just the opposite happened. Our RPO is growing now to$30 billion at 23 percent.

29:16And our sub-revenue is at 21 percent. That's operating at 57 company. 21 plus 36 is 57. And I told the markets we'll be 60 soon, meaning operating at the rule of 60. So two cents is interest expense on five billion because we chose to allocate the capital to debt because we generate so much free cash flow. But in one snapshot, yes, EPS 102 was an expectation versus one dollar. And everybody knows in software, that's the least important measurement at the time. And, Jim, I got to tell you, what other company can say that they're growing the way we are with no compute constraint, no memory constraint, no data center build out constraint, just pure free cash flow, operating margin and revenue growth?

30:10What other one? Not a single one. So shareholders, I gave you my word back, as you said, Jim, early in the year. And the story's only gotten a lot stronger now. You know, we are growing our consumption on this hockey stick of tokens I have out there. 13x year over year, 500 percent month over month. So as you see these revenues, just remember, I've got tokens out there on the street with ServiceNow that we're getting these customers live faster. And as they get live and they go through their first tranche of consumption, they will renew that. And that will be a hockey stick formation that is unlike any other in the enterprise.

30:55So I would just say this is a great quarter, Jim. All right. Well, that's where we're going to leave it, because I think that people have to digest that and say maybe maybe they're looking at this. I thought you explained the two cents very well. They should be looking at the things that you and I know what really matter, which is RPO, revenue growth, new customers, all those going your way. Bill McDermott, chairman and CEO of ServiceNow. Bill, thank you for coming on the show. Thanks a lot, Jim. Appreciate it. We have nice back here for the break. Coming up, was waste management able to pick up a clean quarter?

31:28Kramer's digging in with the CEO to find out next.

31:41A couple months ago, WM, the leading waste management and recycling company, announced that longtime CEO Jim Fish will be retiring at the end of this year. Now, this is bittersweet news, because the Jim Fish era has been one fabulous year for shareholders. Since he took over, get this, as CEO almost exactly a decade ago, WM shares are up nearly 250%, with total shareholder return, though more important, 300%. That significantly outperformed the S &P 500 Industrial Index, and the Dow. Last night, the cut reported third quarter results delivered what looked to be a mixed set of numbers, thanks in large part to higher fuel prices.

32:14That's why the stock dipped a bit today, down over 4%. I'm not too worried. The higher fuel price headwind is out of the company's control. Plus, WM also reiterates for your outlook with the quarter, which is what I care about. So let's take a closer look at the story with Jim Fish, the outgoing CEO of WM. Mr. Fish, congratulations to your upcoming retirement and your fabulous work for shareholders. Thank you, Jim. I appreciate it. OK, so one thing that you did, you were able to change and adapt all in your 10 years. The company really had to deal with some things that people don't realize. You were basically at one point, if there was a lot of housing, there was a lot of housing things to be able to cart away.

32:50And that was a big part of your business that almost disappeared. In the meantime, you went into the into health, into this medical waste business, which has been fantastic. How did you see this this this storyline coming? Well, I think when you look at health care, I mean, look, we're all getting older. I read somewhere that the average American was 29 years old in 1980 and now we're 39 years old. So if I were to ask you, what business do you want to be in that will take advantage of that? It's got to be health care related. So we like the health care business. The volume picture, which they asked a thousand questions on that today on the call, is a long term growth strategy.

33:25What we really wanted to do was take some of the cost out, fix the systems. And all of that has been done over the last two years. Now, I think it's important people might say, well, wait a second. They missed the quarter. You made it very clear. It was diesel. What you didn't have to make clear because people understand it, it's also in the deck. Your company has tremendous defensive characteristics. Yeah. It really does. Well, look, that's kind of the selling point of the industry. It's a defensive stock. It's pretty recession resistant, not recession proof because we do have some commercial business, a lot of commercial business that's dependent on the economy.

33:57But it is recession resistant. And it's just a consistent performer over year, year after year, quarter after quarter. So I think that's what investors really like about it. And if you look at it over time, it's done this. The most worrisome point I felt would have been labor costs. But your technology actually, before AI, your technology figured out how to be able to take out some serious costs. Well, I think today, Tara Hemmer, our new chief operating officer, talked about this joint partnership that we have with Caterpillar. And we're building remotely operated and eventually autonomous heavy equipment.

34:34If you think about our heavy equipment operators, the average age of our heavy equipment operators is 52 years old. So at some point, they're retiring out, and it's hard to hire them today. So autonomy and remote operations with CAT is a great alternative. No, it was terrific. Now, you also did something that I think people do not understand, which is that you did some incredible things for the environment. Didn't have to be this way. You really came up with a sustainable business that turned waste into value. Now, Mr. Stein, your predecessor, had started that. I know that was the direction the company was going.

35:08But you really took it so that it's core to your operating system. You know, these these landfills naturally produce gas. I mean, that's, you know, the trash decomposes. And so what we've done is build, you know, 22 of these plants that take that gas, turn it in. There sure weren't that 22 when you took it over. No, that's for sure. Yeah, there might have been one. There was one in Camden. I visited. We built 20 or 18 over the last couple of years, and we'll add two more next year. But it takes that gas and turns it into pipeline quality gas. And by the way, 75 percent of our fleet runs on natural gas.

35:42So it's a perfect circle. That is amazing. Now, you have to deal with the high price of diesel. Can it go up and up and up without at some point just making the country grow slower? I don't think diesel goes up forever. I think part of it is driven by this, you know, kind of the war in Iran. And diesel was up 80 cents, I think, so about 15 percent in the month of September. And even when you look at our earnings, I mean, it's hard to recapture that in a month's time. I mean, we have a fuel surcharge that kind of evens out the cost with the surcharge. But there's a lag to that. And so that's what we talked about on the call today.

36:18But I don't think diesel goes up forever. In fact, I think it eventually reverses course. Now, I listened to Fed Chief Warsh today, and I think he's got a very good judge of data. But when I listen to you, I've got boots on the ground, empirical data. And you seem to think that the economy is just OK. You weren't giving the economy your full endorsement. No, I think what's happened with the economy is, you know, it's been a pretty good year, but it's been in different sectors. So tech has had a really good year. Real estate and housing have had a bad year. So if you look at which one impacts our business more, it's clearly going to be, you know, the housing business.

36:53Technology doesn't have a huge impact on our business. They don't produce a lot of recycling and trash. So the economy has been a bit mixed, and the sectors that are doing well don't have as big of an impact on us. How about those data centers? They don't produce a lot of trash? Not really. I mean, you know, the data centers, they're good for Caterpillar's business. Yes, exactly right. But for us, they don't produce a lot of recycling, a lot of trash. They're pretty self-sufficient. All right, one last thing. Tell us a little bit about your successor. I know that I think you're young, but I realize you've been 10 years, and you said that you do 10 years.

37:22I knew you wanted to give another person a chance, even though you did terrifically. But how about the man who's going to replace you? Look, I think John Morris is going to be tremendous. He was fantastic on the call. I called him today and said, wow, maybe I should have retired two years ago. You were that good. He's going to be fantastic. Terry Hammer, she's going to be a fantastic chief operating officer. I think the company is really set up well strategically. It's set up well from a senior leadership standpoint. I'm excited to be a shareholder from the outside looking in now. Well, I've got to tell you, you've done a remarkable job and you made it look easy.

37:54I know it wasn't because things just kept changing and changing and changing. But congratulations to everything to you, to your family and everything you accomplished. because you did a great job. Well, thank you very much, Jim. And it's been tremendous getting to know you. And thanks. You're very kind. Well, that's Jim Fish. He's the CEO of WM, a remarkable record and a remarkable company. Matt Money's back here from the break. Coming up, you've got questions. Kramer's got the answers. Get charged up for a fast fire lightning round. Next.

38:36It is time. It's time for the lightning round. It's Rob. You say no. Buy. Buy. Buy. Buy. Buy.

38:46And then the lightning round is over. Are you ready? Steve. Let's start with Carl in Indiana. Carl. Hey. Good afternoon, young man. Thank you. Well, my stock meant a lot more when I proposed last week. But regardless of the activity of the last week, my stock is down and has done nothing since I bought it. I feel like I'm riding a dead horse and I should shoot it and buy Coca-Cola. My stock is Broadcom. Well, Broadcom's been one of the greatest performers of all time, but so is Coca-Cola. I wouldn't shoot Broadcom and I would buy Coca-Cola. How about we go to Scott in California? Scott in California.

39:35How are you doing, Jim? I'm doing well. How are you? I'm doing great. Hey, what do you think about C-Limited now that it's down around$74,$75 a share? No. You know, look, that's the Singapore comedy I've been very negative on. What can I say? I've been negative forever. I'm a negative guy. Let's go to Daniel, Wisconsin. Daniel. Oh, yeah, Jim. Hey, Daniel. What's up? Hey, I'm Dan, the Brewer fan from Wisconsin. Okay. I'm going to a party with 30 ,000 of my closest friends. Okay. God's a Brewer fan, so we're doing good. Well, look at that big guy. He reminds me of myself. What's going on? Not really.

40:23Probably the least like me of anyone. So what's that? I'm thinking about buying Beta for my wife's retirement account. You know, like, look, the whole aerospace complex right now is looking so weak. I'm not going to put you in that lion's den yet. It could rally, but right now it's a lion's den. I am going to Dave in Illinois. Dave! Jim, thank you for all you do in Northwestern Wildcat. Booyah to you. I like that. That's what I was thinking. I bought this as a spec stock last year, and it's down over 70 % from its all-time high this past spring. What's going on with Planet Labs? I think because it's not making money.

41:07I mean, look, all the concept stocks that I like right now are being shredded because it's going higher. And they're not going to rally unless rates have a definitive move down. It really is that simple. Hey, why don't we go to Bill in South Carolina. Bill. Hi, Jim. You rock. Hence. Oh, really? Thank you. Yeah. So, hence, Knife River, KNF. What do you think? You know, look, if you're going to be in that game, you've got to be in Martin Marietta Materials. It's pretty simple. That's my idea for that stock. Now we're going to go, oh, my God, another one. Dave in Illinois. Dave. Dr. Kramer. Two words, my good man, friend.

41:49The Bears. Well, those are two very good words. Sometimes I wish I was born in Chicago, but, you know, I got Howie Roseman in Philadelphia, and we're doing just fine. Although another guy went on injured reserve just now, a second ago, another running back. I am going to have to, on Sunday night, you're going to see me suited up. I can run. I can break tackles. All right? I can break. They call me scattercramer. Okay, what's going on? Jim, last May you pointed out VicorCorp is an emerging AI infrastructure winner. Five months later, a consistent performer. Jim, is VICR still a winner? You know, yeah.

42:29Yes, it is. You know, these stocks, because it's a high-mortem stock, Dave, you know, because it sells at 52 times earnings, people don't want it anymore. Multiple contraction. That's what's happening. Multiple contraction. And that, ladies and gentlemen, the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer is keying in on SK Hynix's report for clues that other data center stocks are set to rally next.

43:24SK Hynix put on a clinic last night about how you can get your stock to move higher, something a bunch of tech companies this evening sure need to return to form for. If you don't know SK Hynix, it's the world's second largest supplier of DRAM, the basic memory semiconductor that's crucial to the data center's information retrieval process, sitting behind Samsung and ahead of Micron. More importantly, though, SK Hynix is the number one supplier of high bandwidth memory, HBM. That's the type of memory that's most in demand for AI data centers. They have a DOM position, HBM. They got a market share in worth of 50%.

43:58Hynix is probably the most important company you've never heard of. It is the South Korean giant, and it is beating heart of the data center, perhaps even more so than NVIDIA. Because if you are using any number of NVIDIA's rivals now, you still need DRAMs. You still need stuff from these guys. If the stock of Hynix is up overnight, there's a really good chance the whole American chip complex is up. And that's what happened today after the company's overnight report. Right now, there is tremendous skepticism about the data center. They are viciously unpopular. We know that they cost a ridiculous amount.

44:27There are companies that have been created just to build them that might not be around in a couple of years. These flaws have coalesced to make it so that when a company in complex reports, no matter how good the numbers are, there's still a chance that the stock might go down. Now, witness G. Vinova today, which couldn't rally despite a very good quarter this morning, although I found the market's judgment rather capricious, if not downright wrong. Although Oracle, a builder of data centers, told a good story today at its meeting, and they're talking about capping costs and becoming more profitable than people thought.

44:56But the king of reporting is now SK Hynix, which is why I want to take you through their clinic to show you what it takes to rally in this market big time. First, the stock of Hynix is a ridiculously low PE multiple, with the South Korea listed shares trading for just three times next year's earnings estimate. Now, I teach how the market arrives at P multiples and how to make money in any market, and Hinex has a multiple that shows you people don't believe the good times can continue. So far, they're wrong. So a low multiple is a great place to store. I make a mental note of that because we own, for the charitable trust, Micron, which trades for less than five times next year's earnings.

45:31Not as low as the unnatural three, but plenty low enough. That makes me think that maybe Micron could have a realistic pin action move. off of Heinis. Very positive. Second, you need a big beat on revenues and margins. Heinis exceeded revenue projections by roughly 6%. That's a real trouncing. Gross margins were an outstanding 85.7%. She was only looking for 84%. And that was a high bar. So, count it as a cherry on top. Heinis also guided for accelerating shipment growth. Expecting mid-20 % growth for this quarter, up from 10 % in the third quarter. Accelerating growth is like catnip to growth investors.

46:06It lets their imagination run wild about how good things can get. Heinex said the demand was so strong that the company's effectively sold out through 2029. It has long-term arrangements with a growing number of customers. That's something that Micron has, too. Only more. Bigger deals with lots of room to make even more if the spot market stays hot, which Micron thinks it will. Heinex paired that outlook with approximately$75 billion in shareholder returns this year, including over$20 billion in dividends and more than $45 billion in buybacks. That's something I am concerned about with Micron.

46:36They have a deal with the federal government not to do a big buyback until after December 9. If Micron is going to roar, it should indicate an even bigger buyback plan well before its next report, which will be after that date of December 9. And Heinex wants to buy a ton of semiconductor capital equipment. Now, in the old days, it was a sin for these companies to buy more equipment because prices would then top as production reached equilibrium with demand. This time, demand is so strong, so powerful that Heinex knows that more supply won't sate the market. That shows a level of confidence that I find extraordinary.

47:06If you get through that gauntlet, then this market says you've got a winner. SK Heinex's U.S.-listed shares rallied more than 13 % today, and I bet that signals that Micron will be more of the same, making it a buy despite its already terrific track record. Something to think about as the whole tech complex, save Microsoft, looks mighty ugly going into tomorrow's session. I like to say there's always a bull market somewhere, And I promise you I find it just for you right here on Mad Money. I'm Jim Cramer. See you tomorrow.

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